Sales of next generation wireless networking products are being hurt by high prices and delays in approving a unified standard that will allow hardware from different manufacturers to work together, industry sources say. According to manufacturers, the lack of a standard is itself one factor behind high prices. Analysts say they are still uncertain when the forthcoming IEEE 802.11n standard for 100mbps-plus [megabit per sec] wireless Lans will be approved.
Discussions on 802.11n at the IEEE, an independent electronics industry body which formulates hardware standards, have been slow, due to strong disagreements over details of the standard. In the interim, manufacturers have released so-called 'pre-n' products which they claim provide higher speeds than existing 802.11g wireless hardware. However, industry sources close to manufacturers in Taiwan say that pre-n sales are weaker than they had hoped.
Analysts point to a number of reasons for the poor market performance. “The [802.11n] standard has not yet been finalised. Our industry check indicates that the 11n final standard is unlikely to be approved this year. Therefore, before the final standard comes out, the interoperability problem between products with different chip suppliers will continue to dampen consumer interest,” commented analyst Aaron Jeng of KGI Securities in Taipei.
In addition, consumers are having trouble understanding why they should pay so much more for the faster wireless hardware. “The US market suggests that the prices of pre-n products, including network interface cards, access points and routers, are still approximately twice those of 11g products,” added Jeng.
Manufacturers point to the lack of a standard as a factor in these high prices. “The whole industry is very concerned about [an] oversupply situation in the channel. As soon as the market knows the spec [has] finalised, all that old pre-n hardware is dead, just immediately dead. Nobody wants to have their warehouse full of pre-n when that occurs. So manufacturing and order quantities you see are so cautious. That lack of economy-of-scale contributes to make the price high,” a source at a Taiwanese wireless hardware manufacturer explained to VNUnet, on condition of anonymity.
Research firm IDC predicts that about 10 per cent of wireless chips sold this year will be for pre-n devices. IDC does not expect Pre-n and 802.11n chips to exceed 20 per cent of the market before 2008. Sales will climb to about 30 per cent the following year, the research company predicts.
The latest so-called 'pre-n' wireless cards and adapters use various interpretations of the IEEE's draft specification. It is uncertain if any of them will be able to work together with true 802.11n products when they become available.
However, the weakness of the market has fostered an unusual show of cooperation between competitors. Chip developers Atheros and Broadcom have tested each other's pre-n products, and claim that they work together at speeds over 100mbps. This is considerably faster than products based on the existing 802.11g wireless standard.
“The excellent performance demonstrated between Atheros and Broadcom devices shows that the 802.11n draft, when adhered to and properly implemented, supports multi-vendor interoperability,” commented Bill McFarland, chief technology officer of Atheros in a press statement. “As the market moves toward these interoperable 802.11n draft chipsets, consumers will be able to purchase a wide range of networking gear from numerous vendors that interoperate at unprecedented speeds.”
Analysts' comments and the IEEE's own timeline suggests a draft standard that unifies all viewpoints will take many months to hammer out, and the final seal of approval for 802.11n will not come for at least a year.
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